Exercise 2 (20 pts) The insurer expects to underwrite premium of P; = 1 600 000 in the specific region and period. To hedge his catastrophic risk the insurer has taken a long position in 64 cat futures at the forward price c=0,70. Calculate the insurer's gain or loss by the end of the period if: . Either regional and insurer's loss ratio achieved 220% Insurer's administrative and acquisition costs amounted to 15% of the gross premium Pe Exercise 2 (20 pts) The insurer expects to underwrite premium of P; = 1 600 000 in the specific region and period. To hedge his catastrophic risk the insurer has taken a long position in 64 cat futures at the forward price c=0,70. Calculate the insurer's gain or loss by the end of the period if: . Either regional and insurer's loss ratio achieved 220% Insurer's administrative and acquisition costs amounted to 15% of the gross premium Pe